Kim Dotcom may see himself as being at war with Hollywood, but the man has quite a sense of theatrics himself. The show he put on for the world tonight at his mansion outside Auckland was audacious and loud, featuring a Maori-themed musical performance by Tiki Taane, a raid re-enactment complete with helicopters marked "FBI," and dancing girls clad in military-style dress (but with miniskirts). That's how Dotcom announced his new service, Mega, to the world.

The service kicked off less than 24 hours ago, one year—to the minute—after Dotcom's house was raided and his old file-sharing service, Megaupload, was shut down.

"Sometimes good things come out of terrible events," Kim told the gathered audience of a few hundred people. "If it wasn't for a giant comet hitting the Earth, we would still be surrounded by angry dinosaurs—hungry, too!" Kim smiled. "And if it wasn't for the raid, we wouldn't have Mega."

He recapped how his company was seized, lamenting how it was shut down without the opportunity to make an argument to a judge. "Communication was taken offline, and free speech was attacked!" Dotcom said, in a staccato light German accent. But the seizures have opened a new public debate, he said. "The Internet belongs to no man, or industry, or government!" he said, to applause. "No matter how many politicians you lobby, no matter how many SOPAs you put together in Congress, you will not succeed in efforts to take control of our Internet!"

Having never watched Dotcom actually speak before, I was impressed by the event. Mixing the Universal Declaration of Human Rights with a techno soundtrack, all in the service of "Internet freedom"—it's quite a trick, and it takes a special kind of guy to pull it off.

Encryption as "refuge from the eye of the community"

So why is Mega going to be the "privacy company?" Because that's the value at great risk in the Internet age, says Dotcom.

"Privacy is a basic human right, but it has become increasingly difficult to communicate privately," said Dotcom. "More and more companies are collecting data about you and your behavior. ISPs are inspecting the data you transfer, on behalf of the content industry. Hosting companies sell their decommissioned services and hard drives with your data still on it... the US government is investing billions into massive spy clouds."

Privacy isn't just a personal or selfish interest—it's a value vital to keeping power in check, he argued. "It's about the human need for refuge from the eye of the community. Privacy maintains balance between the individual and the state."

At that point, perhaps Dotcom believed the audience needed a little reminder about the power of the "state." Because at this point in his talk, helicopters marked with "FBI" on the sides flew over the gathering. A voice boomed over a loudspeaker: "This is a crime scene and an illegal gathering!"

"FBI" Helicopter descends on Kim Dotcom's party.

Mega / Kim Dotcom

The crowd stays seated while jeeps and choppers approach for the "raid."

Mega / Kim Dotcom

Dotcom was quickly surrounded by his "guards," six women in sexy military-style miniskirts, while trucks rolled up to the audience. "Stop this madness!" shouted Dotcom. "Let's all be friends."

Next everything settled down into a sort of straightforward corporate Q&A session. The team behind Mega was introduced. First, CTO Mathias Ortmann, chief marketing officer Finn Batato, and Bram van der Kolk—all arrested during the raid last year—were trotted up onstage.

Next came Tony Lentino, the new CEO of Mega, who is also a major investor who has helped Dotcom through tough times—paying the rent on his house, for example, when he was in prison.

Dotcom describes how he'll stretch out the "long white cloud"

First question from the press: Will Mega be a "Dropbox killer?"

"I think there can be hundreds of competitors [in cloud storage], and they can all do well," said Dotcom. "Some people won't want encryption, and don't care about it. I don't want to see myself as a killer of anything. Ultimately we hope to list our company at the New Zealand stock exchange."

What are the consequences for New Zealand?

"We are going to hire back all Megaupload employees who want to come back, and in addition will hire staff in New Zealand. We are a New Zealand company, New Zealand has been good to us. They saw there is something fishy about this whole case, and we want to give back. Over the coming years, we will hopefully create a few hundred jobs."

What about copyright infringement?

Same answer as before. "We take things down!" said Dotcom. "We take things down. We did that with Megaupload, and went even further [by offering copyright owners direct access to the site]."

"There's a very robust DMCA takedown process on Mega," chimed in Ira Rothken, Dotcom's main US-based lawyer. "There's an automated form, as well as an e-mail process. It meets or exceeds the industry standard for takedowns."

At the end of the questions, Mega's relationship to New Zealand, the host country it looks like he may be bound to for some time, came up again. "This government was too easily convinced of this case [against Megaupload]," said Dotcom in answer to an early question. "I'm not a criminal and I've done nothing wrong. I would like to be an integral part of the New Zealand community. The Maori call New Zealand the 'long white cloud.' I've just made it a little bit longer."

The built-in 2048-bit RSA encryption and the distributed redundant non-USA hosting are fundamental innovations which advance the state of the art where cyberlockers are concerned.

Mega also has bandwidth and storage limitations which vary depending on whether one is a free user or a paid user at increasingly costly levels (Pro I, Pro II, Pro III, etc.). These may prove troublesome.

And Mega still has a very big technical weakness (Mega-FAIL), as clearly identified by TorrentFreak:

However, since Mega has branded itself “The Privacy Company” we couldn’t help but examine the site’s privacy policy, to see what personal information is stored and for how long. As it turns out the company keeps quite detailed records of its users, including IP-addresses.

Mega wrote:

We keep the following personal information:- When a user signs up for particular services on our website they may need to give us the details required in our registration form and keep that information up to date;- Communication logs, traffic data, site usage and other information related to us supplying the services (including for serving of advertising material on our site);- Any personal information included in data uploaded to our system including but not limited to registration information.

We keep records of IP addresses used to access our services.

While this may not be a huge issue for the mainstream, privacy buffs usually prefer more anonymity. Currently dissidents and whistleblowers are not shielded from being exposed by Mega, if the authorities come knocking.

Mega won’t hand personal information out to random strangers of course, but they will cooperate with law enforcement and comply with subpoenas as they should. In their privacy policy they state the following:

Mega wrote:

If we think it is necessary or we have to by law in any jurisdiction then we are entitled to give your information to the authorities.

We reserve the right to assist any law enforcement agency with investigations, including and limited to by way of disclosure of information to them or their agents. We also reserve the right to comply with any legal processes, including but not limited to subpoenas, search warrents (sic) and court orders.

Another strange line we stumbled upon relates to the creditworthiness of Mega users. According to Mega’s terms this type of information can be shared with any person.

Mega wrote:

We can use any information we have about you as a customer relating to your creditworthiness and give that information to any other person for credit assessment and debt collection purposes.

This anonymity aspect is somewhat of a missed opportunity.

TorrentFreak commenters have observed that it will be necessary to concurrently use cascading proxies and cascading VPNs in order to make up for the privacy Mega-FAIL. They have also noted that although some countries require IP address logging and retention, other countries do not (VPNs tend to locate themselves in countries which do not require IP address logging or retention), and that Mega could have and should have located itself only in the non-logging, non-retention countries and designed itself as a "Zero Knowledge" website which neither logs nor retains IP addresses or other privacy-limiting information.

Thus, Dotcom's quote in this article - "Privacy is a basic human right, but it has become increasingly difficult to communicate privately," said Dotcom. "More and more companies are collecting data about you and your behavior." - is simply rank hypocrisy. Mega is both collecting and logging - and giving to third parties - plenty of "data about you and your behavior."

Good thing TorrentFreak and I are around to call him on it, because I clearly pointed all this out well before this article was published by Ars (as a comment to the much earlier "Building Mega" Ars article - my comment was timestamped as being posted 20 hours before Ars published this article), and yet Ars STILL describes Mega as "super-private" in this article! Get a clue, Ars Technica!!!

Also love the way he gets his own back, can you imagine the mood and faces of the MPAA/RIAA etc morons while they were watching this (esp the "FBI raid") ?

As it was over I bet the first thing that came up was "what can we do about this?",then some very "important people in high places" phones started to ring... after all they paid to put them in those high places of office, now they want to know how their employers can repay the favor.

His service is still getting hammered, by the end of this day he's gonna have over a million new members,whichever side you take, you got to admit... thats f**king awesome!

I don't see the point of this service. We have <a href="http://freenetproject.org">freenet</a> for nearly a decade now, with much better service, for a price of few gb of local disk and some bandwith.

Freenet is a different beast than Mega. Freenet is more like a P2P system with integrated chat and direct file-sharing. It depends on end users to provide storage space. Mega is a repository for files. They have large server farms for providing the storage space.

The built-in 2048-bit RSA encryption and the distributed redundant non-USA hosting are fundamental innovations which advance the state of the art where cyberlockers are concerned.

Ok...

commenter 5 wrote:

Mega also has bandwidth and storage limitations which vary depending on whether one is a free user or a paid user at increasingly costly levels (Pro I, Pro II, Pro III, etc.). These may prove troublesome.

Nearly every service has that (Dropbox/Google)... why is that a problem?

commenter 5 wrote:

Yada yada

Why do you feel the urge to keep pasting that large amount of text over and over in each thread?

Privacy buffs will already be using a VPN service (I know I do) that in no way makes Mega a "fail".And if you really want to be secure, to paranoid levels you can still use a VPN and truecrypt to upload "secure" files... not even close to being a "fail".

IF he can get this working in the next few days, he's going to get my money for pretty much 2013... and he will have to be fighting folk away with his huge fists because a lot of people will be throwing money at him as well;500 gigs for $12 is sweeeeeeet! We can retire a few of our RAID boxes and have a cloud backup (anybody who puts all their stuff in any cloud service without a "backup" needs their head examined).

The built-in 2048-bit RSA encryption and the distributed redundant non-USA hosting are fundamental innovations which advance the state of the art where cyberlockers are concerned.

Mega also has bandwidth and storage limitations which vary depending on whether one is a free user or a paid user at increasingly costly levels (Pro I, Pro II, Pro III, etc.). These may prove troublesome.

And Mega still has a very big technical weakness (Mega-FAIL), as clearly identified by TorrentFreak:

However, since Mega has branded itself “The Privacy Company” we couldn’t help but examine the site’s privacy policy, to see what personal information is stored and for how long. As it turns out the company keeps quite detailed records of its users, including IP-addresses.

Mega wrote:

We keep the following personal information:- When a user signs up for particular services on our website they may need to give us the details required in our registration form and keep that information up to date;- Communication logs, traffic data, site usage and other information related to us supplying the services (including for serving of advertising material on our site);- Any personal information included in data uploaded to our system including but not limited to registration information.

We keep records of IP addresses used to access our services.

While this may not be a huge issue for the mainstream, privacy buffs usually prefer more anonymity. Currently dissidents and whistleblowers are not shielded from being exposed by Mega, if the authorities come knocking.

Mega won’t hand personal information out to random strangers of course, but they will cooperate with law enforcement and comply with subpoenas as they should. In their privacy policy they state the following:

Mega wrote:

If we think it is necessary or we have to by law in any jurisdiction then we are entitled to give your information to the authorities.

We reserve the right to assist any law enforcement agency with investigations, including and limited to by way of disclosure of information to them or their agents. We also reserve the right to comply with any legal processes, including but not limited to subpoenas, search warrents (sic) and court orders.

Another strange line we stumbled upon relates to the creditworthiness of Mega users. According to Mega’s terms this type of information can be shared with any person.

Mega wrote:

We can use any information we have about you as a customer relating to your creditworthiness and give that information to any other person for credit assessment and debt collection purposes.

This anonymity aspect is somewhat of a missed opportunity.

TorrentFreak commenters have observed that it will be necessary to concurrently use cascading proxies and cascading VPNs in order to make up for the privacy Mega-FAIL. They have also noted that although some countries require IP address logging and retention, other countries do not (VPNs tend to locate themselves in countries which do not require IP address logging or retention), and that Mega could have and should have located itself only in the non-logging, non-retention countries and designed itself as a "Zero Knowledge" website which neither logs nor retains IP addresses or other privacy-limiting information.

Thus, Dotcom's quote in this article - "Privacy is a basic human right, but it has become increasingly difficult to communicate privately," said Dotcom. "More and more companies are collecting data about you and your behavior." - is simply rank hypocrisy. Mega is both collecting and logging - and giving to third parties - plenty of "data about you and your behavior."

Good thing TorrentFreak and I are around to call him on it, because I clearly pointed all this out well before this article was published by Ars (as a comment to the much earlier "Building Mega" Ars article - my comment was timestamped as being posted 20 hours before Ars published this article), and yet Ars STILL describes Mega as "super-private" in this article! Get a clue, Ars Technica!!!

Are you just copy and pasting the same comment from yesterdays threads? If so, it makes you look like a shill, just saying.

I think I'm starting to see why Al Capone was so popular back in the day. Now obviously there are orders of magnitude difference between the crimes he committed and the possible crimes that Kim Dotcom might have committed but the main point here, as then, is that the government, by enacting stupid laws and acting criminally themselves (then with prohibition and now with intellectual property laws), have made heroes out of the type of person that society would not usually have embraced.

It really goes to show that when the government's actions and their laws make you root for the guy with a shady past there's something seriously wrong with them!

Meh, I thought about paying for the service, but... I'll just go the free Mega route. The guy's ego is being fed enough.

When you slip by on technicalities of law, it's probably best not to start show boating. But, some people can't resist the spotlight.

He isn't slipping by on technicalities of the law.

His lawyer is objecting to what they believe are unfair and in some cases illegal actions by law enforcement and the judges are reviewing the facts of the case and ruling in his favor a lot of the time.

You clearly have not been following his case so don't comment on him slipping by on technicalities.

For little money my data is safer and untouchable for outsiders and I keep my privacy.

Mega is interesting, but there are already services that focus on data privacy (Wuala and Spideroak come to mind, and I'm sure there are others). I'm not sure what unique advantages (if any) Mega offers.

Meh, I thought about paying for the service, but... I'll just go the free Mega route. The guy's ego is being fed enough.

When you slip by on technicalities of law, it's probably best not to start show boating. But, some people can't resist the spotlight.

He isn't slipping by on technicalities of the law.

His lawyer is objecting to what they believe are unfair and in some cases illegal actions by law enforcement and the judges are reviewing the facts of the case and ruling in his favor a lot of the time.

You clearly have not been following his case so don't comment on him slipping by on technicalities.

Lawyer objections are rooted in technicalities. Some technicalities are small, some are egregiously glaring as with the government's heavy handedness in this case. But, a technicality nonetheless.

In the end, you may as well take me to task over any grammatical mistakes I've made if you're going to do it over my use of the term 'technicalities'. My personal definition of a word differing from yours is in itself a technicality.

Oh wait, I forgot to add a personal attack, you know, since that's clearly the best indicator of veracity.

Modern birds are a clade of dinosaurs so he is technically correct. Our ancestors were surrounded by dinosaurs the same way we are today surrounded by dinosaurs. I can see one outside my window right now.

Modern birds are a clade of dinosaurs so he is technically correct. Our ancestors were surrounded by dinosaurs the same way we are today surrounded by dinosaurs. I can see one outside my window right now.

Although we know what you are saying, birds are not dinosaurs any more than you are a Pelycosaur so the statement man walked with dinosaurs is false.

The service kicked off less than hours ago, one year—to the minute—after Dotcom's house was raided and his old file-sharing service, Megaupload, was shut down.

Nice use of em-dashes. Did you just find them? Now what were you trying to get at with this unparsable gobbledegook?

As far as I'm aware, that's correct use of the em-dash. I found the sentence easily readable. You look like a petty—and uninformed—grammatical pedant.(At http://www.grammarbook.com/punctuation/dashes.asp it is argued that the em-dash is overused. I think that it's relatively seldom used.)